Listed below are some of the most frequently asked questions
about buying a luxury yacht.

Documentation

Is the MOA the only important document
associated with existing yachts?

There are two other critical documents worth mentioning,
including the Bill of Sale and the Protocol of Delivery and
Acceptance. The Bill of Sale formally records the transfer of
legal title from buyer to seller, while the Protocol of Delivery
& Acceptance outlines the specific time and date of the
transfer for ensuring insurance cover is seamless.

Finance/Payment

Whether you will have to pay VAT on your superyacht purchase
depends largely on where it is to be kept. A boat belonging to a
European Union (EU) citizen or with an EU country flag must have
Value Added Tax paid. If you have a non-EU vessel, and would like
to keep the yacht in European Union waters, a Value Added Tax may
still be applicable. This depends on the length of time that the
yacht is kept in EU waters. VAT rates range from 15% to 25% of the
superyacht’s value depending on the country. Once it is paid in
one country however, this should suffice for all other tax
authorities. Therefore it is possible to bring the superyacht
through a country with a lower VAT rate, such as Cyprus, Madeira
or Malta. Take note that removal of the superyacht from the EU for
a specific period of time may mean VAT must be paid again. Always
have the correct paperwork onboard to prove VAT status. Those
exempt from VAT include those built and moored in the EU before a
certain past date (often difficult to prove), and those registered
outside the EU, owned by a non-EU resident and used only briefly
in the EU. If the superyacht is to be chartered, establishing a
company as purchaser in the Isle of Man can also neutralise VAT
payments.

Who is responsible for paying the yacht
broker?

Any costs accumulated by the use of a yacht broker are
payable by the seller.

How much can I expect to pay for insurance?

This value will vary dramatically depending on a number of
factors including the owner’s boating experience, the current
navigational equipment onboard, where the superyacht will be
sailed, the value of the vessel and weather it will be used as a
live-aboard or for cruising offshore.

What costs should I expect post-purchase?

After purchasing your superyacht, there are other financial
factors which need to be considered. Maintenance costs are
estimated at 10% of the purchase price annually, and include
things such as crew, fuel, insurance and mooring.

Materials and workmanship are generally guaranteed for a
certain warranty period after delivery, as not all systems and
equipment will be used and tested immediately. Often this
financial security, provided by the builder, will be offered in
the form of a bank guarantee or by the final payment instalment
not being paid until the end of the warranty period.

What happens if the building process is
delayed?

Unfortunately, delays are often a common part of the yacht
building process, so it is often beneficial to agree with the
shipyard how much time is reasonable and how much money should be
deducted from the instalments if delays continue.

What happens if a dispute occurs?

Like most aspects of the buying process, it is always much
easier to agree how any problems will be resolved before they
appear. Often it is advisable to agree that small technical issues
be referred to an independent surveyor, while larger more critical
issues go to arbitration. This way, disputes can be solved in
privacy.

How is the governing law decided?

In most cases, the parties involved can choose which country
will govern the purchasing process. Many buyers choose to select
the law of a country where neither builder or seller are based,
and in fact, the most common choice is English law, even when
there is no connection to England with any of the parties.

Why are some yachts “not for sale to US
residents while in US waters”?

You will see this term next to many yachts advertised for
sale or charter. Any non-USA built vessel which has never paid USA
Customs duty, or a USA built vessel that has been exported and is
currently foreign flagged, can not be offered for sale or charter
to US citizens while in USA waters until making a formal USA
entry. USA duty, assessed at 1.5% of the appraised value, is a one
time taxable event. A duty free formal entry can be made if duty
had previously been paid and can be proven with a receipt or a
returning USA built vessel.

General

International safety regulations dictate that superyachts
over a certain size must have onshore management, although most
owners choose to use their services for protection from fines and
criminal liability when regulations have been breached.

What steps do I need to take with the crew?

The crew will require formal contracts outlining hours of
work, benefits and travelling expenses. These can either be
handled by the owner or manager often depending on what the crew
is accustomed to. Standards of crew training, language and medical
fitness must also be inline with the requirements of the
superyacht’s flag state.